While social and psychological factors are typically considered to be the most significant determinants of teenage drug use, other factors may also play an important role. In this proposed research, we will examine a previously unexplored factor of illicit drug use that has the potential to explain a significant portion of the trends in teenage drug use: the strength of the economy. During the 1990s, the economy steadily improved and there was a large increase in teenage drug use. It is uncertain, however, whether these two trends are related. One can imagine that a stronger economy would offer greater job opportunities for teenagers, which would provide income to buy drugs. At the same time, with more job opportunities and higher wages that a strong economy would provide, the opportunity cost of using drugs would be higher because using drugs could take away from time working and could affect work performance. We propose to examine how teenage drug use changes with variation in state unemployment rates. This research may help us better understand what drives teenage drug use and why teenage drug use increased so much during the 1990s. In addition, with this research, evaluators could parse out the effects of the economy to obtain more accurate estimates of how effective anti-drug campaigns have been. To ensure that unobserved heterogeneity would not affect the estimates, we will estimate bivariate models in which the unobserved propensity to use drugs is allowed to be correlated with the unobserved propensity to work additional hours. The framework developed here could be modified to explore other causes and consequences of drug use.